One of the key technical indicators I watch is the NYSE Bullish Percent Index.
Yesterday (Tuesday 16April) we had a reversal to the downside. This means that more and more stocks in the 2000+ NYSE Company Listings are breaking their price uptrends and moving lower.
For the short term at a minimun we will most likey have declining stock market index values.
Trends are much easier to recognize with the following chart which is referred as a "Point and Figure" chart. This simple chart is actually covering trend changes in the SP500 for the past 13 years.
Recent History:
09Nov2012 - Down column of O's signalling most likely a drop in the SP500 then at 1377. For those so inclined to trade, one would go short the SP500 index with SDS or SH.
20Dec2012 - Quick Reversal to an UP Column of X's. SP500 at 1430. A clear signal to close your short position at a loss. This is a simple fact of trading. Close your losing positions. And for those who trade the Index go long SP500 Index ETF's. Personally I hold cash as I am already long the market with long term equity holdings.
16Apr2013 - Down column of O's signalling most likely a drop in the SP500 then at 1574. For those who went long the SP500 from the 20Dec2012 signal the trade generated a 10% return or more if leveraged with a 2X ETF such as RSU.
So the current NYSE Bullish Percent Index Chart signal is to go SHORT the SP500 Index. My trading stock to do this is SDS (ProShares SP500 2X Short) on the NYSE.
Currently I own this ETF and also own EUO which is a 2X short the EURO vs the US Dollar.
Remember these are short term trading positions and need to be closed to cut losses if the trade is not working.
Click to enlarge
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